OCC releases Q4 report on first-lien mortgage performance

Bank Regulatory Federal Issues OCC Mortgages Foreclosure

On March 19, the OCC released a report on the performance of first-lien mortgages in the federal banking system during the fourth quarter of 2023. According to the report, 97.2 percent of mortgages included in the report were current and performing at the end of the quarter, which is a slight improvement from the fourth quarter of 2022, but also a minor decline from the third quarter of 2023. The report also shows

• a rise in the percentage of seriously delinquent mortgages compared to the previous quarter (1.2 percent in the fourth quarter compared to 1.1 percent in the third quarter), but this percentage has trended down since the fourth quarter of 2021 (when it was 2.3 percent);
• a decline in new foreclosures, with 8,320 new foreclosures in the fourth quarter of 2023, compared to 8,965 new foreclosures the previous quarter and a high of 19,524 new foreclosures in the first quarter of 2022;
• finalization of 7,382 loan modifications, which was less than the 7,436 modifications completed in the prior quarter. Eighty-seven percent of the modifications were “combination modifications,” which are modifications that incorporate more than one type of modification action to improve the loan’s affordability, such as an interest rate reduction and a loan term extension.

First-lien mortgages account for 22.2 percent of the total outstanding residential mortgage debt in the country, representing approximately 11.7 million loans with a combined principal balance of $2.9 trillion.